Press Release
June 6, 2022

Holland & Knight Represents EnerSmart Storage on First Project Financing for Fully Merchant Battery Storage Projects in U.S.

HOUSTON (June 6, 2022) – Holland & Knight advised EnerSmart Storage OpCo II, LLC on the closing of a $78.2 million loan facility with the North American Development Bank (NADBank) and Siemens Financial Services Inc. to finance the design, construction and operation of a portfolio of utility-scale energy storage projects that will be constructed at nine sites in San Diego County, California. The deal appears to be the first reported project financing of fully merchant battery storage projects in the United States.

The energy storage portfolio will be capable of storing up to 330 megawatt-hours (MWh) of electricity, the equivalent of supplying 110,000 customers for up to two hours. Annually, the projects are expected to charge and discharge approximately 87,650 MWh of energy. Electricity from the grid will be stored and delivered through existing transmission lines owned and maintained by San Diego Gas & Electric.

"We are excited to partner with NADBank and Siemens on this innovative project financing, providing EnerSmart with the requisite capital to complete our energy storage project development plans throughout San Diego County. Their support and financing, coupled with the backing of our private equity sponsor, Yorktown Partners, will enable the continued growth and expansion of carbon-free, renewable energy to communities throughout the San Diego region," said Marc La Magna, co-CEO of EnerSmart Storage Holdings LLC.

The projects will provide energy and ancillary services and possibly resource adequacy to the California power grid. These products will be offered and purchased through the California Independent System Operator wholesale energy and ancillary services markets and may also be purchased in the form of resource adequacy agreements.

The projects will also help integrate electricity generated by intermittent renewable energy sources, such as solar and wind, and will support a more reliable power grid by minimizing power disruptions and reducing energy losses resulting from mismatches in supply and demand.

Holland & Knight Partner George Humphrey and Associate Parker Young led the deal for EnerSmart Storage. They were assisted by Partners Robert Saunders, Stephen Humes, Douglas Praw, Jay Bettinger and Justin Boose, and Associates Kevin Ashe, Greg Cragg and Saqib Hossain.

"It was a privilege to help EnerSmart sign up this first-of-kind merchant storage financing," said Mr. Humphrey, who is co-chair of Holland & Knight's Energy Transition Group. "The financing will help EnerSmart realize its significant utility-scale energy storage business, which is at the heart of the energy industry's movement to clean electricity, and provide much-needed firming resources to the California grid."

Holland & Knight's leading energy practice was recently named a 2021 "Energy Practice Group of the Year" by Law360.

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